Case Note & Summary
The petitioners, Esjay International Pvt. Ltd. and its director Sunil G. Jhangiani, are exporters recognized by the Government of India since 1981. They established a manufacturing unit at GIDC, Sarigam, Gujarat in 1993. The Central Government announced a quota policy for 1994-1996. The petitioners obtained a motive power connection of 80 HP on 18 November 1994 and a 20 KV power connection for lighting on 16 June 1995 from the Gujarat Electricity Board (GEB). However, the GEB imposed a power cut on industries at Sarigam for four hours a day and 48 hours a week, which the petitioners claim directly affected and slowed down their production. The power cut remained in force until November 1995, as certified by the Deputy Engineer of GEB. The petitioners sought the benefit of clause 9 of the Government Entitlement Policy, 1994-1996, which provides for extension of time or other relief in cases of force majeure. The respondents, Union of India, Textile Commissioner, and Apparel Export Promotion Council, rejected their claim through orders dated 20 June 2000, 23 June 2000, and 13 October 1996. The petitioners challenged these orders by way of a writ petition under Article 226 of the Constitution of India. The court framed the issue as whether the power cut constitutes force majeure under clause 9. The court analyzed that the power cut was imposed by the GEB, an external agency, and was beyond the control of the petitioners. The power cut directly affected the petitioners' production capacity, making it impossible for them to fulfil their export obligations within the stipulated time. The court held that the power cut qualifies as force majeure and the petitioners are entitled to the benefit of clause 9. Consequently, the court allowed the petition, quashed the impugned orders, and directed the respondents to consider the petitioners' claim for extension of time or other relief under clause 9.
Headnote
A) Administrative Law - Force Majeure - Clause 9 of Government Entitlement Policy, 1994-1996 - Power cut imposed by Gujarat Electricity Board - The court considered whether a power cut imposed by the electricity board constitutes force majeure entitling the petitioners to extension of time for fulfilling export obligations - Held that the power cut was beyond the control of the petitioners and directly affected production, thus qualifying as force majeure under clause 9 (Paras 1, 3, 4).
Issue of Consideration
Whether the petitioners are entitled to the benefit of clause 9 of the Government Entitlement Policy, 1994-1996 on account of force majeure due to power cut imposed by the Gujarat Electricity Board.
Final Decision
The court allowed the writ petition, quashed the impugned orders, and directed the respondents to consider the petitioners' claim for extension of time or other relief under clause 9 of the Government Entitlement Policy, 1994-1996.
Law Points
- Force majeure
- Quota policy
- Export obligation
- Power cut
- Government Entitlement Policy
